If you keep every brokerage statement, pay stub and credit card bill you receive, you’ll have the production crew of “Hoarders” salivating in a matter of months.

But if you toss all your paper without a minimal holding period, you might be unable to flag errors in your account, defend yourself from the IRS, or prove ownership of property should a dispute ever arise.

Tax season, though, is the perfect opportunity to attack your files and figure out what you can shred, what you should retain and how long you need to keep it.

“I don’t care if you have a fancy home office or an accordion folder,“ says Gail Cunningham of the National Foundation for Credit Counseling. “You need to create a financial center in your house and get organized.”

Forever young

There are obvious candidates for the file cabinet (preferably a fire-safe one) — basic legal documents you should keep forever.

That includes birth certificates, current passports, insurance and annuity contracts (for as long as they’re active), wills, Social Security cards, mortgage deeds, real estate bills of sale, marriage certificates, separation or divorce papers and medical records.

You should also keep diplomas and transcripts, adoption and custody papers, insurance records (accident reports, claims and policies) property appraisals, military discharge papers, and an itemized inventory of your household goods, necessary if you ever need to recover stolen items or settle an insurance claim.

For that reason, you should also retain receipts for all major purchases like rugs, jewelry and pianos, as proof of their value.

“I advise homeowners to get out a camera and walk around their house and take pictures of the contents of each room in case they ever have an insurance claim,” says Ted Beck, CEO of the National Endowment for Financial Education.

It’s wise, as well, to keep permanent records of any retirement and pension plan you have, especially those that involve nondeductible IRA contributions, so you can prove that the tax has been paid when you start to make withdrawals.

For an added measure of security, Beck says any legal records that would be hard to replace should be held in a safe deposit box at the bank, keeping all other important documents close at hand so that, in the event of an emergency, you have easy access.

What’s left, you ask? Tons.

Most of the rest of the paper that floods your mailbox has a limited shelf life, though probably a longer one than you would like.

Tax forms

Tax records, for example, need not be held in perpetuity, but the rules here are less concrete.

Generally speaking, you should keep copies of your tax returns for a minimum of seven years, in case you need them to file an amended return or defend yourself in an audit.

The IRS can audit your returns for up to three years after you file if it determines you may owe additional tax, six years if it believes you underreported income by 25 percent or more and up to seven years if you file an incorrect claim for a capital loss from a worthless security.

There is no statute of limitations if you file a fraudulent return, or do not file a return.

That said, you might opt to simply keep your tax returns forever, which needn’t clutter your file cabinet if you scan the paperwork into your computer, back it up electronically and burn it onto a DVD for safekeeping in your safe deposit box.

“My policy is to scan and retain any document that involves value or title, specifically change of value or title,” says Stuart N. Speer, a certified financial planner with Central Financial Services in Kansas City, Ks. “Scanners are cheap and computer memories vast. There is no longer any motivation to destroy documents that might prove useful in making some future point, and which we can produce or conceal at our option.”

Supporting documents

In addition to the actual tax return, of course, you’ll want to keep any records that help support deductions you claimed for as long as the IRS can contest your return.

That includes documents that show proof of income, like Forms W-2 and 1099, bank statements, brokerage statements and Form K-1.

If you own a home, you should also keep closing statements (since you’ll need information off of it when you sell), purchase and sales invoices and proof of payment and insurance records.

Likewise, the IRS says you’ll want to retain sales slips, invoices, receipts, canceled checks or other proof of payment and written communications from qualified charities relevant to a claim.

As for income or losses generated by your investments, the IRS suggests keeping year-end brokerage statements, mutual fund statements, and Forms 1099 and 2439.

Until all distributions are made from your IRA, the IRS also suggests that you keep copies of documents that show contributions made to your IRA, distributions received and the value of your IRA, along with Form 1099-R for each year you received a distribution and Form 8606 for each year you made a nondeductible contribution to your IRA or received distributions.

Other items you may need to keep for tax purposes: receipts for medical and dental expenses you paid with a distribution from Health Savings Account or Medical Savings Account, a written separation agreement or the divorce or support decree if you receive or pay alimony, records related to home office expenses (including gas bills and mortgage interest statements if you write off a portion for business use), medical receipts for a health or medical savings account, and other evidence for which you may have claimed a tax incentive, like moving expenses.

Most other paperwork that clutters your coffee table falls under the category of “as long as it’s useful.”

All investors, for example, should retain a record of their cost basis for any securities they own, which they’ll need when they go to sell it, says Tom Balcom, a certified financial planner with IBIS Wealth Management in Boca Raton, Fla., and president of the Financial Planning Association of Greater Ft. Lauderdale.

Your cost basis, the original price you paid, determines how much capital gains tax you’ll owe when you sell your shares. Without it, you could be forced to pay more than you owe.

“If you change brokerage firms, in particular, your cost basis information might get lost, so I always recommend keeping the last statement you receive from that firm so you know what your cost basis was,” says Balcom.

Monthly statements

You can trash your monthly or quarterly brokerage statements as new ones arrive, unless it helps you keep track of your transactions, but keep your year-end statements indefinitely, says Beck.

He adds you should also keep your car title along with your record of service and any warranty information until you sell the vehicle, and keep credit card bills for no more than a year, unless you need them for your tax return.

“My policy is to find out what I have access to through online banking and for how long,” says Beck, noting some financial institutions limit your ability to search back statements to three months, while others remain available for several years. “All banks are different.”

It’s generally safe to trash your utility bills after the next month’s bill shows it was paid, again unless you’re claiming a home office deduction or tracking usage.

And likewise, you can shred (to ward off identity thieves) your paycheck stubs after a year once you’ve reconciled your income with your W-2 form at tax time, says Beck, but save the final paycheck you receive for each job you have and your last 401(k) statement before you leave. (It’ll help if the company gets sold or goes under and your retirement earnings come into question.)

“I’ve seen people try to unravel an old account and finding someone who can sign off on it is a very hard thing to do if you don’t have documentation,” he says.

The IRS also recommends keeping most canceled checks for seven years (in case of an audit), but those involving “important payments” like taxes, purchases of property, and special contracts should be permanently filed with the papers pertaining to the transaction.

Lastly, keep any receipts for major home improvement projects (not basic maintenance expenses), too, for as long as you own the property, along with the receipts for expenses related to its sale (realtor’s commission, legal fees) since you may be able to use them to increase the cost basis of your home when you go to sell -- thus lowering the amount of capital gains tax you’ll potentially owe.

These days, of course, most banks and lenders are putting account information online, allowing clients to check balances and transactions for the last few years using a secure server.

But don’t assume your financial institutions are looking out for you.

“It’s always the case that the thing you need to save is the one you don’t have,” says Speer. “Credit card bills, pay stubs and financial statements in many instances are already online so it doesn’t take any time to just pull them up and save them as a PDF on your computer so you’ve got a second repository for all these documents. I do that and I advise my clients to do the same,” he says. “Put them in a folder, and the next time you need it, hallelujah! It’s there.”

For more information about reprints & permissions, visit our FAQ's. To report corrections and clarifications, contact Standards Editor Brent Jones. For publication consideration in the newspaper, send comments to letters@usatoday.com. Include name, phone number, city and state for verification. To view our corrections, go to corrections.usatoday.com.